Explaining productivity differences in North Carolina factories

Using detailed survey data collected from 95 large factories in North Carolina, this article examines the reasons why some factories are more productive than others. Six distinct measures of productivity are used as independent variables in the regression analyses reported. The results suggest five major themes that are shared by the most productive plants: simpler flow of materials through the process, valuing people, attending to quality, investing in hardware, and accounting for the industry's productivity growth. Several factors such as size and unionization are of no apparent importance to an explanation of cross‐factory productivity differences.